What happened? And what's next?
Supply is the leading factor. The shale-gas revolution has outpaced production estimates from just two years ago.
In 2008, Pennsylvania had to import 75 percent of the natural gas it needed each year. The commonwealth was expected to be supplying all its own gas by 2009 and to become an exporter by 2014. But it actually reached that point last year.
At the same time, drilling in other shale formations around the country is also producing immense volumes of gas, adding to the glut.
Demand, meanwhile, remains relatively low. A mild winter gets the short-term blame. Low demand from manufacturing and related gas-intensive industries is having a more sustained impact.
Natural-gas users, of course, are reaping the benefits of prices that have not been this low since 1999. The cost of heating an average home with gas this winter is expected to be about $700, a figure that will likely drop further if the moderate weather continues. This allows people and businesses to save money and spend it elsewhere in the economy.
Though good in that sense, low natural-gas prices are bad for producers, many of whom can't continue to spend money on wells that aren't profitable under current and foreseeable conditions. In the coming months, Pennsylvanians can expect to see fewer Marcellus Shale natural-gas wells drilled, along with a decline in the conventional natural-gas wells that have dotted the state's western counties for decades.
